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maltatoday, Sunday, 23 auguSt 2015 News Fitch confirms 'A' rating for Malta MiriaM Dalli Credit rating agency Fitch has affirmed Malta's 'A' rating with a stable outlook and with an 'AAA' country ceiling. Finance minister edward Sciclu- na welcomed the positive rating, saying it confirmed the govern- ment's confidence in attaining am- bitious budgetary targets to keep the deficit down. Fitch said the gradual improve- ment of Malta's public finances, strong economic growth and low- er nominal interest expenditure were key rating drivers. the "gov- ernment's efforts to restructure government-owned entities and pro-actively seeking to attract in- vestment into new growth sectors are also being acknowledged," Sci- cluna said. Fitch expects the headline fis- cal deficit to fall to 1.8% of GdP in 2015, with total revenue as a per- centage of GdP reaching a record high of 42.8%. As in previous years, government spending will be driven by a higher public wage bill, reflecting in part a rise in the number of health and education workers, and higher so- cial benefits. However, at 16.9% of GdP at end- 2014, government-guaranteed debt for its public companies was among the highest in the european Union and continues to weigh on cred- itworthiness. Most are related to state-owned enterprises, in partic- ular the utility company, enemalta. But after the recent purchase of 33% of its assets by a Chinese firm, enemalta's financial position has started to improve, thanks in part to lower energy imports and new infrastructure investment, which has reduced the risk that contin- gent liabilities will crystallise. Private consumption growth retained momentum in the first quarter of the year, helped by fall- ing unemployment, lower energy costs and steady credit growth. Although gross fixed capital for- mation contracted in year-on-year terms in the first quarter of 2015, investment is expected to pick up in the short term, helped by the construction of a new power plant and the completion of eU-funded projects. Fitch forecasts the economy to expand by around 3.6% this year, above the 'A' and 'AA' medians. "the Maltese economy will contin- ue to outperform eurozone peers in the medium term, even as GdP growth is set to moderate slightly from 2016 onwards," Fitch said. "the country's services sectors will remain the most dynamic, led by higher tourist arrivals and expansion of the gaming industry. there are some risks from rising unit labour costs, but at present there are few signs of a loss of price competitiveness, highlighting a structural shift in the economy to higher value-added services. How- ever, failure to improve productiv- ity could create growth bottlenecks in the longer term." 'Beware TTiP' Friends of the Earth and the Front Against TTIP (Malta) yesterday took an eight-metre inflatable Trojan horse to Ta' Qali to warn farmers why the Maltese agriculture was at risk of the Transatlantic Trade and Investment Partnership. Friends of the Earth's Elena Portelli said US agribusinesses had been lobbying throughout the negotiations to remove trade restrictions in European farming policies. But the Maltese government and the Chamber of Commerce have both come out strongly in favour of the TTIP. The EC said that while EU states will not be forced to import hormonally treated meat, they will not be disallowed from doing so. "If the market opens its doors to hormonally- treated meat, it will ultimately end up as the standard for farmers who want to remain competitive," Portelli said. PHOTOGRAPHY BY Ray attaRd